[flyzies]

One of the best research articles ive read on China. It talks about the real underlying geopolitical goals of China's government.

Some of the most interesting points it raises:
1) Han China is the real heartland of China; always has been throughout history and still is today.
2) China has three overriding geopolitical imperatives; maintain internal unity in the Han Chinese regions, maintain control of the buffer regions and protect the coast from foreign encroachment.
3) It talks about why the United States Navy is China's biggest threat.
4) China's current economic system's (export oriented) survival is dependent on her customers cash flow.
5) Interests of coastal regions and interior regions are vastly different. CCP's survival depends on its ability to balance the needs of the two.

It's called THE GEOPOLITICS OF CHINA: A Great Power Enclosed and can be found here:
http://www.marketora...rticle5059.html

Quote

HE GEOPOLITICS OF CHINA: A Great Power Enclosed
By George Friedman

Contemporary China is an island. Although it is not surrounded by water (which borders only its eastern flank), China is bordered by terrain that is difficult to traverse in virtually any direction. There are some areas that can be traversed, but to understand China we must begin by visualizing the mountains, jungles and wastelands that enclose it. This outer shell both contains and protects China.

China as an Island Internally, China must be divided into two parts: The Chinese heartland and the non-Chinese buffer regions surrounding it. There is a line in China called the 15-inch isohyet. On the east side of this line more than 15 inches of rain fall each year. On the west side annual rainfall is less than that. The bulk of the Chinese population lives east and south of this line. This is Han China, the Chinese heartland. It is where the vast majority of Chinese live and the home of the ethnic Han, what the world regards as the Chinese. It is important to understand that over a billion people live in an area about half the size of the United States.

The Chinese heartland is divided into two parts, northern and southern, which in turn is represented by two main dialects, Mandarin in the north and Cantonese in the south. These dialects share a writing system but are almost mutually incomprehensible when spoken. The Chinese heartland is defined by two major rivers -- the Yellow River in the north and the Yangtze in the South, along with a third lesser river in the south, the Pearl. The heartland is China's agricultural region. However -- and this is the single most important fact about China -- it has about one-third the arable land per person as the rest of the world. This pressure has defined modern Chinese history -- both in terms of living with it and trying to move beyond it.

A ring of non-Han regions surround this heartland -- Tibet, Xinjiang province (home of the Muslim Uighurs), Inner Mongolia and Manchuria. These are the buffer regions that historically have been under Chinese rule when China was strong and have broken away when China was weak. Today, there is a great deal of Han settlement in these regions, a cause of friction, but today Han China is strong.

China Provinces These are also the regions where the historical threat to China originated. Han China is a region full of rivers and rain. It is therefore a land of farmers and merchants. The surrounding areas are the land of nomads and horsemen. In the 13 th century, the Mongols under Ghenghis Khan invaded and occupied parts of Han China until the 15 th century, when the Han reasserted their authority. Following this period, Chinese strategy remained constant: the slow and systematic assertion of control over these outer regions in order to protect the Han from incursions by nomadic cavalry. This imperative drove Chinese foreign policy. In spite of the imbalance of population, or perhaps because of it, China saw itself as extremely vulnerable to military forces moving from the north and west. Defending a massed population of farmers against these forces was difficult. The easiest solution, the one the Chinese chose, was to reverse the order and impose themselves on their potential conquerors.

There was another reason. Aside from providing buffers, these possessions provided defensible borders. With borderlands under their control, China was strongly anchored. Let's consider the nature of China's border sequentially, starting in the east along the southern border with Vietnam and Myanmar. The border with Vietnam is the only border readily traversable by large armies or mass commerce. In fact, as recently as 1975, China and Vietnam fought a short border war, and there have been points in history when China has dominated Vietnam. However, the rest of the southern border where Yunnan province meets Laos and Myanmar is hilly jungle, difficult to traverse, with almost no major roads. Significant movement across this border is almost impossible. During World War II, the United States struggled to build the Burma Road to reach Yunnan and supply Chiang Kai-shek's forces. The effort was so difficult it became legendary. China is secure in this region.

China Terrain Hkakabo Razi, almost 19,000 feet high, marks the border between China, Myanmar and India. At this point, China's southwestern frontier begins, anchored in the Himalayas. More precisely, it is where Tibet, controlled by China, borders India and the two Himalayan states, Nepal and Bhutan. This border runs in a long ark past Pakistan, Tajikistan and Kirgizstan, ending at Pik Pobedy, a 25,000-foot mountain marking the border with China, Kirgyzstan and Kazakhstan. It is possible to pass through this border region with difficulty; historically, parts of it have been accessible as a merchant route. On the whole, however, the Himalayas are a barrier to substantial trade and certainly to military forces. India and China -- and China and much of Central Asia -- are sealed off from each other.

The one exception is the next section of the border, with Kazakhstan. This area is passable but has relatively little transport. As the transport expands, this will be the main route between China and the rest of Eurasia. It is the one land bridge from the Chinese island that can be used. The problem is distance. The border with Kazakhstan is almost a thousand miles from the first tier of Han Chinese provinces, and the route passes through sparsely populated Muslim territory, a region that has posed significant challenges to China. Importantly, the Silk Road from China ran through Xinjiang and Kazakhstan on its way west. It was the only way to go.

China Ethnolinguistic Groups

There is, finally, the long northern border first with Mongolia and then with Russia, running to the Pacific. This border is certainly passable. Indeed, the only successful invasion of China took place when Mongol horseman attacked from Mongolia, occupying a good deal of Han China. China's buffers -- Inner Mongolia and Manchuria -- have protected Han China from other attacks. The Chinese have not attacked northward for two reasons. First, there has historically not been much there worth taking. Second, north-south access is difficult. Russia has two rail lines running from the west to the Pacific -- the famous Trans-Siberian Railroad (TSR) and the Baikal-Amur Mainline (BAM), which connects those two cities and ties into the TSR. Aside from that, there is no east-west ground transportation linking Russia. There is also no north-south transportation. What appears accessible really is not.

The area in Russia that is most accessible from China is the region bordering the Pacific, the area from Russia's Vladivostok to Blagoveschensk. This region has reasonable transport, population and advantages for both sides. If there were ever a conflict between China and Russia, this is the area that would be at the center of it. It is also the area, as you move southward and away from the Pacific, that borders on the Korean Peninsula, the area of China's last major military conflict.

Then there is the Pacific coast, which has numerous harbors and has historically had substantial coastal trade. It is interesting to note that, apart from the attempt by the Mongols to invade Japan, and a single major maritime thrust by China into the Indian Ocean -- primarily for trade and abandoned fairly quickly -- China has never been a maritime power. Prior to the 19 th century, it had not faced enemies capable of posing a naval threat and, as a result, it had little interest in spending large sums of money on building a navy.

China, when it controls Tibet, Xinjiang, Inner Mongolia and Manchuria, is an insulated state. Han China has only one point of potential friction, in the southeast with Vietnam. Other than that it is surrounded by non-Han buffer regions that it has politically integrated into China. There is a second friction point in eastern Manchuria, touching on Siberia and Korea. There is, finally, a single opening into the rest of Eurasia on the Xinjiang-Kazakh border.

China's most vulnerable point, since the arrival of Europeans in the western Pacific in the mid-19 th century, has been its coast. Apart from European encroachments in which commercial interests were backed up by limited force, China suffered its most significant military encounter -- and long and miserable war -- after the Japanese invaded and occupied large parts of eastern China along with Manchuria in the 1930s. Despite the mismatch in military power and more than a dozen years of war, Japan still could not force the Chinese government to capitulate. The simple fact was that Han China, given its size and population density, could not be subdued. No matter how many victories the Japanese won, they could not decisively defeat the Chinese.

China is hard to invade; given its size and population, it is even harder to occupy. This also makes it hard for the Chinese to invade others -- not utterly impossible, but quite difficult. Containing a fifth of the world's population, China can wall itself off from the world, as it did prior to the United Kingdom's forced entry in the 19 th century and as it did under Mao Zedong. All of this means China is a great power, but one that has to behave very differently than other great powers.
China's Geopolitical Imperatives

China has three overriding geopolitical imperatives:

1. Maintain internal unity in the Han Chinese regions.
2. Maintain control of the buffer regions.
3. Protect the coast from foreign encroachment.

Maintaining Internal Unity
China is more enclosed than any other great power. The size of its population coupled with its secure frontiers and relative abundance of resources, allows it to develop with minimal intercourse with the rest of the world, if it chooses. During the Maoist period, for example, China became an insular nation, driven primarily by internal interests and considerations, indifferent or hostile to the rest of the world. It was secure and, except for its involvement in the Korean War and its efforts to pacify restless buffer regions, was relatively peaceful. Internally, however, China underwent periodic, self-generated chaos.

China Population Density

The weakness of insularity for China is poverty. Given the ratio of arable land to population, a self-enclosed China is a poor China. Its population is so poor that economic development driven by domestic demand, no matter how limited it might be, is impossible. However, an isolated China is easier to manage by a central government. The great danger in China is a rupture within the Han Chinese nation. If that happens, if the central government weakens, the peripheral regions will spin off, and China will then be vulnerable to foreigners taking advantage of Chinese weakness.

For China to prosper, it has to engage in trade, exporting silk, silver and industrial products. Historically, land trade has not posed a problem for China. The Silk Road allowed foreign influences to come into China and the resulting wealth created a degree of instability. On the whole, however, it could be managed.

The dynamic of industrialism changed both the geography of Chinese trade and its consequences. In the mid-19 th century, when Europe -- led by the British --compelled the Chinese government to give trading concessions to the British, it opened a new chapter in Chinese history. For the first time, the Pacific coast was the interface with the world, not Central Asia. This in turn, massively destabilized China.

As trade between China and the world intensified, the Chinese who were engaged in trading increased their wealth dramatically. Those in the coastal provinces of China, the region most deeply involved in trading, became relatively wealthy while the Chinese in the interior (not the buffer regions, which were always poor, but the non-coastal provinces of Han China) remained poor, subsistence farmers.

The central government was balanced between the divergent interests of coastal China and the interior. The coastal region, particularly its newly enriched leadership, had an interest in maintaining and intensifying relations with European powers and with the United States and Japan. The more intense the trade, the wealthier the coastal leadership and the greater the disparity between the regions. In due course, foreigners allied with Chinese coastal merchants and politicians became more powerful in the coastal regions than the central government. The worst geopolitical nightmare of China came true. China fragmented, breaking into regions, some increasingly under the control of foreigners, particularly foreign commercial interests. Beijing lost control over the country. It should be noted that this was the context in which Japan invaded China, which made Japan's failure to defeat China all the more extraordinary.

Mao's goal was three-fold, Marxism aside. First, he wanted to recentralize China -- re-establishing Beijing as China's capital and political center. Second, he wanted to end the massive inequality between the coastal region and the rest of China. Third, he wanted to expel the foreigners from China. In short, he wanted to recreate a united Han China.

Mao first attempted to trigger an uprising in the cities in 1927 but failed because the coalition of Chinese interests and foreign powers was impossible to break. Instead he took the long march to the interior of China, where he raised a massive peasant army that was both nationalist and egalitarian and, in 1948, returned to the coastal region and expelled the foreigners. Mao re-enclosed China, recentralized it, and accepted the inevitable result. China became equal but extraordinarily poor.

China's primary geopolitical issue is this: For it to develop it must engage in international trade. If it does that, it must use its coastal cities as an interface with the world. When that happens, the coastal cities and the surrounding region become increasingly wealthy. The influence of foreigners over this region increases and the interests of foreigners and the coastal Chinese converge and begin competing with the interests of the central government. China is constantly challenged by the problem of how to avoid this outcome while engaging in international trade.

Controlling the Buffer Regions
Prior to Mao's rise, with the central government weakened and Han China engaged simultaneously in war with Japan, civil war and regionalism, the center was not holding. While Manchuria was under Chinese control, Outer Mongolia was under Soviet control and extending its influence (Soviet power more than Marxist ideology) into Inner Mongolia, and Tibet and Xinjiang were drifting away.

At the same time that Mao was fighting the civil war, he was also laying the groundwork for taking control of the buffer regions. Interestingly, his first moves were designed to block Soviet interests in these regions. Mao moved to consolidate Chinese communist control over Manchuria and Inner Mongolia, effectively leveraging the Soviets out. Xinjiang had been under the control of a regional war lord, Yang Zengxin. Shortly after the end of the civil war, Mao moved to force him out and take over Xinjiang. Finally, in 1950 Mao moved against Tibet, which he secured in 1951.

The rapid-fire consolidation of the buffer regions gave Mao what all Chinese emperors sought, a China secure from invasion. Controlling Tibet meant that India could not move across the Himalayas and establish a secure base of operations on the Tibetan Plateau. There could be skirmishes in the Himalayas, but no one could push a multi-divisional force across those mountains and keep it supplied. So long as Tibet was in Chinese hands, the Indians could live on the other side of the moon. Xinjiang, Inner Mongolia and Manchuria buffered China from the Soviet Union. Mao was more of a geopolitician than an ideologue. He did not trust the Soviets. With the buffer states in hand, they would not invade China. The distances, the poor transportation and the lack of resources meant that any Soviet invasion would run into massive logistical problems well before it reached Han China's populated regions, and become bogged down -- just as the Japanese had.

China had geopolitical issues with Vietnam, Pakistan and Afghanistan, neighboring states with which it shared a border, but the real problem for China would come in Manchuria or, more precisely, Korea. The Soviets, more than the Chinese, had encouraged a North Korean invasion of South Korea. It is difficult to speculate on Joseph Stalin's thinking, but it worked out superbly for him. The United States intervened, defeated the North Korean Army and drove to the Yalu, the river border with China. The Chinese, seeing the well-armed and well-trained American force surge to its borders, decided that it had to block its advance and attacked south. What resulted was three years of brutal warfare in which the Chinese lost about a million men. From the Soviet point of view, fighting between China and the United States was the best thing imaginable. But from Stratfor's point of view, what it demonstrated was the sensitivity of the Chinese to any encroachment on their borderlands, their buffers, which represent the foundation of their national security.

Protecting the Coast
With the buffer regions under control, the coast is China's most vulnerable point, but its vulnerability is not to invasion. Given the Japanese example, no one has the interest or forces to try to invade mainland China, supply an army there and hope to win. Invasion is not a meaningful threat.

The coastal threat to China is economic, and most would not call it a threat. As we saw, the British intrusion into China culminated in the destabilization of the country, the virtual collapse of the central government and civil war. It was all caused by prosperity. Mao had solved the problem by sealing the coast of China off to any real development and liquidating the class that had collaborated with foreign business. For Mao, xenophobia was integral to natural policy. He saw foreign presence as undermining the stability of China. He preferred impoverished unity to chaos. He also understood that, given China's population and geography, it could defend itself against potential attackers without an advanced military-industrial complex.

His successor, Deng Xiaoping , was heir to a powerful state in control of China and the buffer regions. He also felt under tremendous pressure politically to improve living standards, and he undoubtedly understood that technological gaps would eventually threaten Chinese national security. He took a historic gamble. He knew that China's economy could not develop on its own. China's internal demand for goods was too weak because the Chinese were too poor.

Deng gambled that he could open China to foreign investment and reorient the Chinese economy away from agriculture and heavy industry and toward export-oriented industries. By doing so he would increase living standards, import technology and train China's workforce. He was betting that the effort this time would not destabilize China, create massive tensions between the prosperous coastal provinces and the interior, foster regionalism or put the coastal regions under foreign control. Deng believed he could avoid all that by maintaining a strong central government, based on a loyal army and communist party apparatus. His successors have struggled to maintain that loyalty to the state and not to foreign investors, who can make individuals wealthy. That is the bet that is currently being played out.
China's Geopolitics and its Current Position

From a political and military standpoint, China has achieved its strategic goals. The buffer regions are intact and China faces no threat in Eurasia. It sees a Western attempt to force China out of Tibet as an attempt to undermine Chinese national security. For China, however, Tibet is a minor irritant; China has no possible intention of leaving Tibet, the Tibetans cannot rise up and win, and no one is about to invade the region. Similarly, the Uighur Muslims represent an irritant in Xinjiang and not a direct threat. The Russians have no interest in or capability of invading China, and the Korean peninsula does not represent a direct threat to the Chinese, certainly not one they could not handle.

The greatest military threat to China comes from the United States Navy. The Chinese have become highly dependent on seaborne trade and the United States Navy is in a position to blockade China's ports if it wished. Should the United States do that, it would cripple China. Therefore, China's primary military interest is to make such a blockade impossible.

It would take several generations for China to build a surface navy able to compete with the United States Navy. Simply training naval aviators to conduct carrier-based operations effectively would take decades -- at least until these trainees became admirals and captains. And this does not take into account the time it would take to build an aircraft carrier and carrier-capable aircraft and master the intricacies of carrier operations.

For China, the primary mission is to raise the price of a blockade so high that the Americans would not attempt it. The means for that would be land- and submarine-based-anti-ship missiles. The strategic solution is for China to construct a missile force sufficiently dispersed that it cannot be suppressed by the United States and with sufficient range to engage the United States at substantial distance, as far as the central Pacific.

In order for this missile force to be effective, it would have to be able to identify and track potential targets. Therefore, if the Chinese are to pursue this strategy, they must also develop a space-based maritime reconnaissance system. These are the technologies that the Chinese are focusing on. Anti-ship missiles and space-based systems, including anti-satellite systems designed to blind the Americans, represent China's military counter to its only significant military threat.

China could also use those missiles to blockade Taiwan by interdicting ships going to and from the island. But the Chinese do not have the naval ability to land a sufficient amphibious force and sustain it in ground combat. Nor do they have the ability to establish air superiority over the Taiwan Strait. China might be able to harass Taiwan but it will not invade it. Missiles, satellites and submarines constitute China's naval strategy.

For China, the primary problem posed by Taiwan is naval. Taiwan is positioned in such a way that it can readily serve as an air and naval base that could isolate maritime movement between the South China Sea and the East China Sea, effectively leaving the northern Chinese coast and Shanghai isolated. When you consider the Ryukyu Islands that stretch from Taiwan to Japan and add them to this mix, a non-naval power could blockade the northern Chinese coast if it held Taiwan.

Taiwan would not be important to China unless it became actively hostile or allied with or occupied by a hostile power such as the United States. If that happened, its geographical position would pose an extremely serious problem for China. Taiwan is also an important symbolic issue to China and a way to rally nationalism. Although Taiwan presents no immediate threat, it does pose potential dangers that China cannot ignore.

There is one area in which China is being modestly expansionist -- Central Asia and particularly Kazakhstan. Traditionally a route for trading silk, Kazakhstan is now an area that can produce energy, badly needed by China's industry. The Chinese have been active in developing commercial relations with Kazakhstan and in developing roads into Kazakhstan. These roads are opening a trading route that allows oil to flow in one direction and industrial goods in another.

In doing this, the Chinese are challenging Russia's sphere of influence in the former Soviet Union. The Russians have been prepared to tolerate increased Chinese economic activity in the region while being wary of China's turning into a political power. Kazakhstan has been European Russia's historical buffer state against Chinese expansion and it has been under Russian domination. This region must be watched carefully. If Russia begins to feel that China is becoming too assertive in this region, it could respond militarily to Chinese economic power.

Chinese-Russian relations have historically been complex. Before World War II, the Soviets attempt to manipulate Chinese politics. After World War II, relations between the Soviet Union and China were never as good as some thought, and sometimes these relations became directly hostile, as in 1968, when Russian and Chinese troops fought a battle along the Ussuri River. The Russians have historically feared a Chinese move into their Pacific maritime provinces. The Chinese have feared a Russian move into Manchuria and beyond.

Neither of these things happened because the logistical challenges involved were enormous and neither had an appetite for the risk of fighting the other. We would think that this caution will prevail under current circumstances. However, growing Chinese influence in Kazakhstan is not a minor matter for the Russians, who may choose to contest China there. If they do, and it becomes a serious matter, the secondary pressure point for both sides would be in the Pacific region, complicated by proximity to Korea.

But these are only theoretical possibilities. The threat of an American blockade on China's coast, of using Taiwan to isolate northern China, of conflict over Kazakhstan -- all are possibilities that the Chinese must take into account as they plan for the worst. In fact, the United States does not have an interest in blockading China and the Chinese and Soviets are not going to escalate competition over Kazakhstan.

China does not have a military-based geopolitical problem. It is in its traditional strong position, physically secure as it holds its buffer regions. It has achieved it three strategic imperatives. What is most vulnerable at this point is its first imperative: the unity of Han China. That is not threatened militarily. Rather, the threat to that is economic.
Economic Dimensions of Chinese Geopolitics

The problem of China, rooted in geopolitics, is economic and it presents itself in two ways. The first is simple. China has an export-oriented economy. It is in a position of dependency. No matter how large its currency reserves or how advanced its technology or how cheap its labor force, China depends on the willingness and ability of other countries to import its goods -- as well as the ability to physically ship them. Any disruption of this flow has a direct effect on the Chinese economy.

The primary reason other countries buy Chinese goods is price. They are cheaper because of wage differentials. Should China lose that advantage to other nations or for other reasons, its ability to export would decline. Today, for example, as energy prices rise, the cost of production rises and the relative importance of the wage differential decreases. At a certain point, as China's trading partners see it, the value of Chinese imports relative to the political cost of closing down their factories will shift.

And all of this is outside of China's control. China cannot control the world price of oil. It can cut into its cash reserves to subsidize those prices for manufacturers but that would essentially be transferring money back to consuming nations. It can control rising wages by imposing price controls, but that would cause internal instability. The center of gravity of China is that it has become the industrial workshop of the world and, as such, it is totally dependent on the world to keep buying its goods rather than someone else's goods.

There are other issues for China, ranging from a dysfunctional financial system to farm land being taken out of production for factories. These are all significant and add to the story. But in geopolitics we look for the center of gravity, and for China the center of gravity is that the more effective it becomes at exporting, the more of a hostage it becomes to its customers. Some observers have warned that China might take its money out of American banks. Unlikely, but assume it did. What would China do without the United States as a customer?

China has placed itself in a position where it has to keep its customers happy. It struggles against this reality daily, but the fact is that the rest of the world is far less dependent on China's exports than China is dependent on the rest of the world.

Which brings us to the second, even more serious part of China's economic problem. The first geopolitical imperative of China is to ensure the unity of Han China. The third is to protect the coast. Deng's bet was that he could open the coast without disrupting the unity of Han China. As in the 19 th century, the coastal region has become wealthy. The interior has remained extraordinarily poor. The coastal region is deeply enmeshed in the global economy. The interior is not. Beijing is once again balancing between the coast and the interior.

The interests of the coastal region and the interests of importers and investors are closely tied to each other. Beijing's interest is in maintaining internal stability. As pressures grow, it will seek to increase its control of the political and economic life of the coast. The interest of the interior is to have money transferred to it from the coast. The interest of the coast is to hold on to its money. Beijing will try to satisfy both, without letting China break apart and without resorting to Mao's draconian measures. But the worse the international economic situation becomes the less demand there will be for Chinese products and the less room there will be for China to maneuver.

The second part of the problem derives from the first. Assuming that the global economy does not decline now, it will at some point. When it does, and Chinese exports fall dramatically, Beijing will have to balance between an interior hungry for money and a coastal region that is hurting badly. It is important to remember that something like 900 million Chinese live in the interior while only about 400 million live in the coastal region. When it comes to balancing power, the interior is the physical threat to the regime while the coast destabilizes the distribution of wealth. The interior has mass on its side. The coast has the international trading system on its. Emperors have stumbled over less.
Conclusion

Geopolitics is based on geography and politics. Politics is built on two foundations: military and economic. The two interact and support each other but are ultimately distinct. For China, securing its buffer regions generally eliminates military problems. What problems are left for China are long-term issues concerning northeastern Manchuria and the balance of power in the Pacific.

China's geopolitical problem is economic. Its first geopolitical imperative, maintain the unity of Han China, and its third, protect the coast, are both more deeply affected by economic considerations than military ones. Its internal and external political problems flow from economics. The dramatic economic development of the last generation has been ruthlessly geographic. This development has benefited the coast and left the interior -- the vast majority of Chinese -- behind. It has also left China vulnerable to global economic forces that it cannot control and cannot accommodate. This is not new in Chinese history, but its usual resolution is in regionalism and the weakening of the central government. Deng's gamble is being played out by his successors. He dealt the hand. They have to play it.

The question on the table is whether the economic basis of China is a foundation or a balancing act. If the former, it can last a long time. If the latter, everyone falls down eventually. There appears to be little evidence that it is a foundation. It excludes most of the Chinese from the game, people who are making less than $100 a month. That is a balancing act and it threatens the first geopolitical imperative of China: protecting the unity of the Han Chinese.

Your working hard to understand China analyst,

John F. Mauldin

[Sampanviking]

No doubt about it, its a pretty good summary. well worth pinning as a reference piece.

Thanks Flyzies

[Violet Oboe]

Some funny economic theories (...so China is in an unilateral dependency situation as an exporting nation but the US is not as the main global importer of foreign goods??) and the guy should know that for years now the US is only the second most important trade partner of China after the EU. (...what would the poor Chinaman do without all the (meanwhile rather broke! ) Joe Sixpack's buying up his stuff? Oh man there he could have done better! )

Nevertheless he has observed correctly that maintaining a stable coherence of the Han nation is of paramount importance for the chinese leadership and that managing the tensions between coastal regions and the vast internal regions is consequently the prime challenge for them. At least a somewhat better effort from Mauldin than most of the usual crappy anti-China pieces...!

[Sampanviking]

Well I guess you can't please everybody. Fortunately this was primarily about China's physical security and not its economics.

[IchiNiSan]

Economics:

The USA is definitely much less dependent on her "suppliers" in the Far East (West to that new continent), then China on our foreign "customers". While the USA still holds the most important strategic industries in their firm hands, and only moved out the lower-end, relatively-easy and quickly-to-setup consumer products manufacturers, the USA still has a huge and biggest consumer markets of the world. However, even though the importing part of the American consumer market is very important to the exporting countries, it is much less crucial and important for the Americans. If you put it in perspective, USA is actually still fully self-sufficient and have much more choices than only importing from one foreign supplier. A 500-men Shoe factory you can close up tomorrow in GuangDong and move it several thousands of kilometers to the South-West and voila you have a brand new Shoe factory in Vietnam. For my part the opportunistic entrepreneur move it into the interior China, and businesses are still rolling for both the moving manufacturer and the low-cost greedy consumer. We can argue about the efficiency, effectiveness and productivity when moving the factory to a lesser developed economic zone, such as because of the manpower availability, infrastructure etc, but I believe this is not of such importance if we are overlooking this deal from the big picture. In conclusion is that if one day nobody is willing to sell to the USA (how likely that would be), the USA would have enough manufacturing and manpower power left to overcome a painful period AND still have a huge internal consumer market to keep this manufacturing either at home or abroad running at full steam.

In comparison, China lacks this internal consumer market AND we miss way too much competitive strategic industries in a scenario where we are not exporting (like the USA is not importing). You walk on a Sunday afternoon in 4-5 shopping malls in Shenzhen, and you will understand what I mean by a lack of internal consumer market. Fine because of the numbers, you will notice a hugeload of (window)-shoppers, but it is nothing compared to the dynamics and money-rotating consumer atmosphere in consuming markets such as Hong Kong or the States. And if you drive your car around the parking lot a bit, you will notice that from the look these shopping mall visitors are definitely having above-average incomes. For the average Chinese it is still most important, save up the money for any calamities in their relatively uncertain future (saving is a trademark of a under-developed country, which people has less confidence in the stability of the future), and buy the basic needs to feed the family. This saving and basic-consuming (including housing) are already accounting for the most part of the low-income. I believe this is also why the Chinese policy planners are having a hard time how to boost this up, and examples as imposing (and ever increasing) the minimum wages it seems like they are betting on that the increase of costprice (less competitive) will be traded off with a bigger consumer market and/or an industry-upgrade in the more developed economic zones. I have my doubts about this "minimum wage" policy though, but the message is clear, our policy makers share the same opinion as the author. We are becoming way too dependent on our exporting and should gradually, but not too slow, become really fully self-sufficient with our own in-potential-biggest consumer market and have a coverage of all key strategic competitive industries. So either it is the USA, the EU, Japan or whoever our biggest customer, who cares, bottom line is we became too dependent on all these lao wai. Why else you believe that our leaders would even care to take shit from a witchy bitchy Merkel? Or give slimey Sarkozy a helping hand in soothening the public anger?

[Player 0]

http://www.globalresearch.ca/index.php?con...a&aid=11638

Here's an article that fits well here, and pretty much summerizes things that we already mostly know.

Nowadays, most International Relations analysts acknowledge China?s potential to achieve superpower status over the course of the next decades due to its impressive economic growth, which was triggered by Deng Xiaoping?s economic reforms program (inspired by theorists like Friedrich List).


Chinese power has also increased considerably in military, geopolitical, trade and financial affairs. Some experts have even contemplated the possibility of China becoming the world?s greatest power, overtaking the US. For instance, Goldman Sachs has predicted that China?s GDP will surpass America?s sometime circa 2050.


However, one must always bear in mind that if Beijing indeed succeeds in becoming the ?first among equals?, it would not be the first time such event takes place. The ?Middle Kingdom? was already a mighty empire thousands of years before the US was even founded. Thus, China (both as a State and as a civilization) has flourished for centuries and has outlived the Roman, Persian, Arabian, Turkish, Mongol, and British empires, which is by no means an easy accomplishment.


Needless to say, Washington feels its position might be seriously threatened in the long run. The Project for a New American Century stipulates that the US must prevent any power(s) or coalition thereof (read China and Russia) from effectively challenging American power. Therefore, America?s top policy makers are well aware that China is certainly a serious contender and, for that reason, have been implementing a strategy specifically designed to check Chinese mounting power. Below we will dissect and explore American efforts meant to curb China as well as Chinese countermoves.


The US plans toward China comprises the following components:


Number one: An updated version of classical containment which was an American strategy conceived by US geoestrategist George Kennan during the early years of the Cold War to limit the Soviet Union?s power projection capabilities. This was clearly reflected in the creation of NATO (North Atlantic Treaty Organization), an alliance whose purpose was to keep "the Americans in, the Russians out, and the Germans down".


In order to achieve Great Power status, one must ensure regional security in one?s neighboring areas. This can be done by attracting potential allies, establishing a patronage over weak States and by excluding hostile powers from one?s own immediate periphery. The US Monroe Doctrine, formulated at a time when America was an emerging power, is an enlightening example because it expresses American determination to enthrone Washington?s exclusive primacy in the American hemisphere.


In the present day, there is not a formal structure akin to an Asian version of NATO. Nevertheless, the US has been continuously seeking to establish military bases close to Chinese borders. Washington has established a meaningful military presence in Mindanao (the Philippines), Okinawa (Japan), the Korean Peninsula, Kyrgyzstan and Afghanistan (which is in fact NATO-occupied). Moreover, some of China?s neighbors are staunch allies of the West: Japan, Australia, Taiwan and the Philippines. All of them have forged an important degree of military cooperation with Washington and have also purchased a great deal of American-made arms.


So far, Washington has not tried to encircle China?s borders as aggressively and in the case of Russia (expansion of NATO, missile defense facilities in Eastern Europe and so on). This is not because America is somehow friendlier towards China but because Beijing?s military capabilities are not as threatening as those of Moscow, whose military power and huge nuclear arsenal possess the ability to challenge the US in the case of war, to say the least.


Moreover, the American ?cordon sanitaire? around China is far from being complete. Beijing has developed a strong partnership with Moscow through the SCO (Shanghai Cooperation Organization) which also encompasses Kazakhstan, Uzbekistan, Tajikistan Kyrgyzstan. The SCO, curiously referred to as the ?Shanghai Pact? by former Chinese President Jiang Zemin, is not yet a full-fledged military alliance but it definitely has the potential to reach that point provided Sino-Russian strategic cooperation continues to thrive in the coming years. It is interesting to highlight that the US membership application was rejected by SCO members.


It would be a severe mistake to underestimate the SCO. If its level of strategic coordination deepens, the SCO?s combined power would turn to be outright frightening for NATO. SCO member States (not including observers):



Control a vast portion of the Eurasian landmass.


Contain huge population centers.


Command large armies equipped with state-of-the-art weaponry (ICBMs, fighter jets, satellites, strategic bombers and fleets of tanks).


Possess massive reserves of natural resources (oil, gas, uranium, metals and fresh water).


Own important industrial plants.


Have accumulated some of the largest amounts of foreign currency reserves.


Can convince other countries to join their organization as full members like India, Pakistan, Mongolia, Iran, Turkmenistan, Belarus, a post-Yuschchenko Ukraine, Armenia, Syria, etc.

Not long ago, US forces were expelled by fellow SCO member Uzbekistan from the Karshi-Khanabd air base (a.k.a. K2), located in its territory. Tashkent strengthened its links with both Beijing and Moscow after a presumably US-masterminded ?Color Revolution? backfired and ultimately failed to produce regime change in that Central Asian republic.


China has also tried to court other neighboring States through an intensification of trade flows. For example, South Korea, although it still hosts a large number of American troops, has implemented a foreign policy carefully crafted not to irritate China. Seoul knows that Beijing, through its leverage and influence on Pyongyang, holds one of the most important keys to an eventual Korean reunification and that China is a force that can contribute to (geo)political stability and offer interesting business opportunities in East Asia.


The ?Middle Kingdom? has successfully attracted Myanmar as an ally. Myanmar (a.k.a. Burma) borders the Southern part of the Peoples? Republic of China and it contains important raw materials like natural gas, marble, gems, precious stones and exotic woods. Myanmar?s government has sided with Asia?s rising powers such as China, India and, to a lesser degree, Russia through closer trade, diplomatic and military relations. Beijing has plans to establish intelligence facilities in Myanmar?s territory and, taking into account a growing Chinese military presence there, it is clear that China intends to intensify its alliance with Myanmar.


In 2007, the world witnessed the ?Saffron Revolution? (please note the term, where have we heard something similar before?), a series of protests led by Buddhist monks and political elements prone to adopt pro-Western positions. This unrest was most likely orchestrated by American intelligence personnel, eager to overthrow Myanmar?s current government and replace it with pro-Western rulers. Myanmar?s governmental forces, despite Western isolation and attempts to impose sanctions and backed by full Chinese and Russian support, ultimately prevailed.


This methodology is not new at all and it seems to be almost a carbon copy of other ?Color Revolutions? instigated in the post-Soviet space. However, the latest attempts to apply this recipe have failed in Belarus, Uzbekistan and Myanmar. It can also be added that some of the first governments which took over thanks to ?Color Revolutions? are already facing a considerable deal of trouble. For instance, Georgia was defeated by Russia when its government decided to invade South Ossetia; furthermore, Mikheil Saakashvili?s impudence was further punished by Moscow?s diplomatic recognition of both Abkhazia and South Osettia. Plus, Ukraine (along with Georgia) was denied NATO Membership Action Plans because of old Europe?s fear of irresponsibly antagonizing Moscow. Serbia has just signed a deal to increase energy cooperation with Russia?s Gazprom.


Number two: The implicit threat of using American sea power to enforce a naval blockade against China to interrupt both its shipment of goods overseas as well as the flow of critical raw materials.


Chinese economic growth fuels an ever-increasing demand of energy and raw materials. However, domestic supplies are not enough to meet those needs. For example the People?s Republic of China is currently the second largest importer of oil. Therefore, the aforementioned means that China?s manufacturers must resort to foreign sources to provide the necessary resources for their production activities. Many of these foreign providers are located in areas far away from China?s borders, namely the Middle East and Africa. That implies that a considerable part of Chinese critical supplies have to be seaborne.


Moreover, the Middle Kingdom?s major industrial production centers are to be found in zones close to China?s Pacific seaboard. Thus, the overwhelming majority of Chinese export products have to be transported by ship as well.


As far as the Chinese flow of imports and exports is concerned, it is significant to highlight the importance of the Malacca Strait, a tight waterway positioned between Peninsular Malaysia and the Indonesian island called Sumatra. Such shipping lane is indeed a chokepoint because, if the United Stated decided to enforce a naval blockade around it, the flow of Chinese imports and exports would suffer a lethal blow.


The US, much like its British predecessor, is the world?s leading sea power and that, combined with all of the above, represents a serious strategic vulnerability to China who obviously does not want to depend on American goodwill to conduct its commercial exchange overseas.


The ?Middle Kingdom? is aware of this military gap between American forces and its own. Beijing also acknowledges that developing a competitive sea power is a task which demands a colossal sum of resources in terms of time, manpower, materials, R & D and money. Therefore, China knows that it will not have the ability to directly challenge American naval primacy in one generation or two. Yet, that does not mean that there are not powerful asymmetric equalizers that can be used to counter the US apparently unrivaled sea power.


Beijing?s military doctrine is quite flexible and methodologically creative. If the ?Middle Kingdom? perceives an imminent military threat from America, it can make use of its foreign currency reserves (currently the largest in the world), which are denominated in US dollars, as a strategic weapon. If China decides to get rid of its dollars reserves, the consequences will be devastating for the US, perhaps triggering its economic, social, military and political collapse.


Some analysts dismiss this scenario as far-fetched; they argue that China would hesitate to unleash financial hell upon the US because Chinese exporters would also suffer considerably from the dollar?s fall. Nevertheless, they seem to forget that, historically, States are indeed willing to sacrifice some of their meaningful economic interests when their very survival is at stake. One just needs to remember that Germany and Britain were important trading partners right before World War One broke out?


Furthermore, China has been studying American over-reliance on real-time information feed collected through spy satellites in order to wage war. Thus, the ?Middle Kingdom? has discovered that US ground, sea and air forces would be left almost blind if deprived of data provided by its satellite network. Not surprisingly, Beijing?s military-industrial complex has been busy designing and testing a variety of anti-satellite weapons. In 2006 a Chinese land-based laser illuminated an American satellite. A year later, China destroyed one of its own weather satellites by using a modified version of ballistic missile technology.


The Chinese government has actively engaged in diplomatic talks in order to foster land-based oil and gas pipeline projects in order to secure its energy security and to diminish its dependence on seaborne supplies of oil. Beijing has succeeded in establishing an oil pipeline which provides China with both Russian and Kazakh petroleum. Likewise, the ?Middle Kingdom? plans to build pipelines connecting oil and/or gas producing-countries (like Iran, Myanmar and the Russian Far East) with Chinese territory.


It is worth mentioning that there have been many rumors in strategic circles concerning Chinese plans to open a military base in Iran and to set a naval outpost in Gwadar, Pakistan. It is way too early to confirm authoritatively weather these projects will indeed materialize. At least, one can confidently assert that the motivation is clear, i.e. to enhance Chinese power projection capabilities beyond its borders and to protect its uninterrupted energy supply.


Number three: Divide and rule, i.e. American efforts to dismantle Chinese territorial integrity and dissolve China?s internal political uniformity. The US and the West know that China is a lot harder to balkanize than Serbia; nevertheless, they have used their intelligence agencies in order to create a persistent irritant that can distract Beijing and force it to divert its resources.


The People?s Republic of China, like most other nation-States on Earth, is not a country which is ethnically or geographically homogenous. The ?Middle Kingdom?

is home to different ethnicities, cultures and religions.


China?s largest ethnic group is the Han people. They comprise the majority of the country?s population. Both China?s Eastern seaboard (the area where the wealthiest cities are located) and its (more agricultural) heartland are inhabited by Han Chinese.


However, there are regions of the Chinese territory whose main population are not Han Chinese. The most important cases are the Xinjiang-Uyghur Autonomous Region and the Tibet Autonomous Region.


Xinjiang-Uyghur, located in the Northwestern part of China, is strategically important because it borders Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Pakistan and Afghanistan. Thus, this piece of land represents China?s territorial contact with Central Asia. It is essential to indicate that this autonomous region contains large deposits of minerals and oil. Xinjiang-Uyhgur is populated by people who profess the Islamic religion and who belong to the Turkic ethnicity, which is why this zone is also called ?Eastern Turkestan?.


Western intelligence agencies have predictably provided covert support for both Islamic and separatist forces inside Xinjiang-Uyghur. In fact, these forces have already demonstrated both their political willingness as well as their operational capability to carry out terrorist attacks.


On the other hand, Tibet is an issue Washington and Brussels have exploited in order to fracture Chinese internal unity. It is vital to take into consideration that even open source intelligence material confirm that the Dalai Lama himself was working undercover along the CIA in order to undermine Chinese control over Tibet during the early decades of the Cold War. One can only wonder if such collaboration continues today. Natural resources play an important part as well: Tibet might have some the world?s largest reserves of uranium. Moreover, this autonomous region is rich in gold, copper, drinking water and could even possess valuable deposits of both oil and gas.


In March 2008 a series of riots broke out all over Tibet and especially in its capital Lhasa. Beijing accused the ?Dalai Lama gang? of inciting unrest which was eventually restrained by Chinese law enforcement. The Dalai Lama?s Western supporters took political advantage of this situation and launched a PR attack against China?s government. Some Western leaders even threatened to boycott the Beijing Olympics. The somewhat na?ve ?Free Tibet? crowds even held protests in some Western capitals. During these events, it is critical to take into account that Moscow expressed a strong diplomatic and political support for Beijing.


The Han Chinese themselves are not immune to foreign geoestrategists prone to balkanize their rivals. For example, the Falun Gong movement (described by some as a ?cult?) has been outlawed by the Chinese government. In strategic circles, it has been argued that Beijing regards Falun Gong as a CIA front whose task is to provoke instability and induce turmoil in the Chinese mainland.


Moreover, China?s rural population who live in the country?s heartland can also become an attractive target to someone willing to spread political discontent because they have not yet caught up with the wealth and prosperity experienced by the coastal industrial cities.


Conclusion


It seems that China is continuously advancing toward a greater role in the international system?s distribution of power. The ?Middle Kingdom? is increasingly assertive in defending its interests. The West (North America plus Europe) along with its followers (Japan, Australia, et al.) are willing to counter China?s rise. Nevertheless, Beijing is more determined than ever to recover its great power position and has forged strategic alliances (with Moscow and the Central Asian Republics) as well as partnerships in East Asia, the Middle East and elsewhere. Additionally, China and its allies have been perfecting a strategy to challenge Western plans to contain Eurasia?s rising powers. We can therefore anticipate that such rivalry will intensify as the stakes become higher and higher.